Three years after passage of AB 32, the California Air Resources Board (CARB) took one more step in implementing California's 2006 landmark environmental legislation by adopting a fee structure to fund the program.
At CARB's September 25 meeting in Diamond Bar, the board unanimously voted to adopt an administrative fee that will generate an estimated $63.1 million in new revenue. The exaction was described as being necessary to continue funding California's climate-change program and to repay program start-up loans.
CARB staff predict that the new fee structure would have a total economic impact as follows: a small family restaurant would pay about $17 per year, a 100-person office would pay about $9 per year, a full-service grocery store would pay $120 per year, and an average household would pay an additional 77 cents per year for natural gas and electricity and 80 cents per year for using their vehicles.
The direct fee-payers will be large natural gas distributors; large users of natural gas; producers and importers of gas and diesel fuel; facilities that combust coal and petroleum coke; refineries; cement manufacturers; and electricity importers and in-state generating facilities. CARB staff said that some of the fees would be passed on to businesses and consumers.
According to the new revised fee estimates by CARB staff, the following emissions sources would generate the following fee revenue: gasoline would generate $21.6 million, natural gas would generate $14.6 million, in-state and imported electricity would generate $13.2 million, diesel would generate $6.6 million, coal would generate $1.2 million, and cement processing would generate $0.9 million.
Concerns were voiced over where exactly the fee would be assessed. Previously, CARB staff had considered moving the fee implementation from the point of refinery to an alternative point. However, upon reviewing alternative proposals, staff determined that the best place to assess a fee would be at the refinery level.
The proposed fees were developed at three previous workshops and have been considered at previous CARB meetings.
A representative of the AB 32 Implementation Group (a coalition that includes Cal-Tax) noted that CARB has not been entirely transparent about how the new fee was developed.
An AB 32 IG spokesman said that while there was no opposition to a conceptual administrative fee, there is significant concern for how the administrative fee was to be developed. Recently, AB 32 IG filed a Public Records Act request, which was denied by a superior court judge on September 18.
CARB Legal Counsel Ellen M. Peter said that the court focused on a significant number of pages not released, which she said were drafts. She said those pages did not have to be released. She also commented that early discussions of where an administrative fee was to be assessed did not have to be released to the public. Ms. Peter said that CARB has been transparent by releasing necessary documents on its website.
According to Ms. Peter, not every paper has to be handed over to the public. The AB 32 IG, however, said the board should have released accounting data on the new fee structure, to provide better public understanding.
Cal-TaxReports, September 28, 2009
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